Crude oil long-term projection

Coronavirus situation has put the world on high alert as it surely causes a slowdown in the economy. Adding to the situation, OPEC failed to secure a deal with its non-member. It means the oil price war will happen as all parties will return to the normal production level.

Fundamentally, crude oil prices will continue to move lower as the coronavirus situation worsens each day. If OPEC continues production without any deal, it will deepen the fall of crude oil prices.

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New Month

Monthly chart

After the bearish engulfing pattern near the monthly SMA 200, crude oil prices direction continues bearish. This month, the price almost touches the 2015 low. No change in the analysis yet, traders will continue to hold short positions and move the stop to breakeven or in profit level near $42.52.

Weekly chart

On the weekly chart, crude oil gapped down and extend its downward movement to near $26.05. The price then bounces and currently traded near the weekly opening level. A bullish correction might happen to close the bearish gap. However, traders might want to continue to avoid long positions as the situation is bearish for crude oil.

Daily chart

A bearish gap on the daily chart suggesting traders to avoid both long and short positions for now. Waiting for a further clue on the next direction is the best action traders could do. The price expected to test 2015 low and produce a reaction. We think oil might temporarily higher after the test but continue lower in the long-term.

Trade plan

Either long positions or short positions are hard to take at the current level. Crude oil prices move lower with major bearish momentum both supported from fundamental and technical analysis. The price soon will test 2015 low and try to break below it. Volatility might get higher which means traders better stick with short-term positions while waiting for a clue in the long-term direction.